After recording positive growth for seven consecutive months, exports contracted 3.67 per cent in February to USD 25.68 billion, although the trade deficit showed a marked improvement mainly on account of a significant decline in gold imports.

The trade deficit in February, as per data released by the government today, narrowed to USD 8.13 billion, the lowest level in five months. It improved mainly on account of a 71.42 per cent decline in gold and silver imports to USD 1.63 billion in February from USD 5.71 billion in the same month a year earlier.

Apex exporters body FIEO said that due to the decline in overseas shipments, India's exports will fall short of target by about USD 15 to 18 billion. The government has estimated exports at USD 325 billion in this financial year.

"Credit is the biggest problem which exporters are facing. Arrears of duty refund claims have crossed Rs 20,000 crore. Global demand is there but we are unable to take advantage of this due to credit problem," Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said.

After registering a 13.47 per cent growth in October, exports recorded growth in single digits until January.

Sectors contributing significantly to the export basket such as petroleum, engineering and pharmaceuticals registered a decline in February.

For the April-February period, exports were up 4.79 per cent to USD 282.7 billion.

Imports during the 11-month period fell 8.65 per cent to USD 410.86 billion. The trade deficit during this period was USD 128 billion.

Non-oil imports in February declined 24.5 per cent to USD 20.12 billion.

During April-February, non-oil imports dipped 13.4 per cent to USD 259.02 billion. However, oil imports during the period rose 0.8 per cent to USD 150.63 billion.